Gannett posts 2nd-qtr profit above analyst views despite sales drop

Gannett beats forecast with 2Q profit; shares jump

NEW YORK — Gannett Co., the largest U.S. newspaper publisher, topped expectations for its second-quarter earnings Wednesday as it reversed a loss from a year ago, even though advertising revenue continues to dive. Its shares jumped 15 percent in morning trading.

The McLean, Va.-based company, which publishes USA Today and other daily newspapers, reported a profit of $70.5 million, or 30 cents per share. That compares with a loss of $2.29 billion, or $10.03 per share, a year ago, when the company took a hefty write-down on its declining market value.

Excluding special items, Gannett posted adjusted earnings of 46 cents per share, exceeding the average analyst forecast of 36 cents per share, according to Thomson Reuters.

Revenue in the latest quarter fell 18 percent to $1.41 billion, below analysts’ projection for sales of $1.46 billion.

Ad revenue in Gannett’s publishing division, which includes more than 80 U.S. daily newspapers, dropped 32 percent. That was only slightly better than in the first quarter, when the unit posted a 34 percent decline, and indicates that the newspaper industry remains far from a turnaround.

Other large publishers have posted similar declines this year. Ad revenue fell 33 percent at The Washington Post Co.’s namesake newspaper in the first quarter and 27 percent overall at The New York Times Co. McClatchy Co.’s print ad sales fell 33 percent in that period. Those companies have not yet reported second-quarter results.

Despite the continued decline in advertising, Gannett’s better-than-expected earnings pushed the company’s stock up 52 cents, or 15 percent, to $4.01 in morning trading. The shares remain near the low end of their 52-week range of $1.85 to $21.68.